EMN
Eastman Chemical Company
$62.33
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Undervalued
Trading 34.6% below fair value
You pay
$62.33
Bear
$76.20
Fair
$95.25
Bull
$114.30
Bear
$76.20
+22.3%
$6.35 × 12x P/E
Fair
$95.25
+52.8%
$6.35 × 15x P/E
Bull
$114.30
+83.4%
$6.35 × 18x P/E
Adjust Assumptions
15.0x
6.35$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
9.8x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (35 analysts)
$76.89
Divergence from AlphaVal
24%
Summary
Applying a 15x P/E to adjusted EPS of $6.35, the base-case value is $95.25 per share. DDM cross-check: $57.34.
Warnings
The company's reported profits differ from official accounting profits by 55%. Check what costs are being left out of the adjusted number.
The company pays out 82% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Dividend-based valuation: $57.34 (below our primary estimate by 40%). Large gaps may signal the dividend doesn't reflect full earning power.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples